Jindrichovska, IrenaUgurlu, ErginbayKubickova, Dana2021-11-012021-11-012013978-80-86175-87-4https://hdl.handle.net/11491/64797th International Days of Statistics and Economics -- SEP 19-21, 2013 -- Prague, CZECH REPUBLICIn this paper we explore two relevant theories of company capital structure - pecking order theory and trade-off theory on a sample of Czech firms. In trade of theory; companies identify their optimal capital structure and weigh up the advantages and disadvantages of an additional monetary unit of debt. To test both theories panel data methodology is used over a sample of 94 Czech companies during the years 2005-2010 with the use of annual data. Because we use lagged dependent variable amongst independent variables to test pecking order theory and trade-off theory we employ Arellano and Bond (1991) GMM and Anderson and Hsiao (1982) 2SLS models. We explore the influence on total debt ratio as a dependent variable in two formats and independent/explanatory variables, which correspond to specific company characteristics depending on previous literature. Our results suggest that both theoretical approaches contribute to explain capital structure in Czech firms.eninfo:eu-repo/semantics/closedAccessCapital structuretrade off theorypecking order theorybig companiestransitional economyDynamic Panel Data ModelsConference Object509520N/AWOS:000339103100052